US-Iran war impacts Indian financial markets: PSU banks, NBFCs hit
The U.S.-Iran war has shaken up India's financial markets, with the Nifty PSU Bank Index dropping more than 6%.
The Strait of Hormuz, a key oil route, has also been reported closed. This sent crude oil prices and India's bond yields higher, putting extra pressure on public sector banks and NBFCs.
Rising oil prices and yields squeeze PSB banks, NBFCs
When global tensions push up oil prices, it hits more than just fuel costs.
PSU banks are seeing profits shrink due to investment losses from rising yields, while NBFCs face tighter margins as borrowing costs spike.
Sectors like vehicle loans, MSMEs, microfinance, and gold lending are feeling the squeeze — companies like Shriram Finance and Bajaj Finance have seen their shares slide by up to 6%.
If inflation pressures persist, the Reserve Bank of India may delay rate cuts, which could keep borrowing expensive for a while.